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Gaps in the management of group disability insurance, but not a systemic problem

by

Andrea Lubeck

15 March 2019 13:30

Photo : Freepik

Thefinancial markets Authority says it does not see a ” systemic problem in the management of group disability insurance “, in his report of the intervention, cross-group disability insurance, published yesterday, Thursday, 14 march. The regulator also noted some gaps, particularly in relation to the information communicated to the members and to the training of the staff of the insurers processing the applications.

The Authority has consulted with a number of insurers active in group insurance of persons present in Quebec, ” which account for almost 90 % of the market share in the field of group disability insurance “, in order to obtain a comprehensive picture of business practices in the industry and ensure that they were adequate and allowed for a fair treatment of the consumer. To do this, the controller has sent a request for information to the ten major insurers active in the market and conducted interviews with the majority of these insurers.

Fixes to make

The Authority has identified four practices that ” require adjustments “. In general, the regulator noted a lack of transparency or accessibility to information for the consumer, the process for the review of an application for benefits, the process of processing of a complaint, and the criteria to determine the need to call in a health professional.

Therefore, it is particularly expected of insurers that they set up a basic training program and ongoing for staff dealing with applications for benefits and to establish tools to properly inform the participant ” in a simple and clear language “.

The Authority also requests that insurers made it possible to formalize criteria for determining the need to consult with a health care professional. They are also required to communicate a refusal and provide the complainant the steps to perform a review of the decision, making this process simple.

Measures already in place

The Authority claims that as a result of its passage, some insurers have already started the process to put in place certain measures.

She also says that she will perform a follow-up to “custom” the implementation of the recommended best practices from the insurers surveyed in the framework of its monitoring mandate.

The suites of the case Archibald

Without mentioning it explicitly in its opinion dated April 2018, this investigation of the Authority came in the wake of the bursting of the case of Samuel Archibald, who had blazed the headlines in February 2018. The case has made it to the national Assembly, while the debate surrounding the bill 141 was in progress.

“The Authority also carries a great deal of attention to particular situations that are shared by consumers in the context of complaints and denunciations, or of which it becomes aware through news reports or publications, in different media, writing the Authority. The Authority is of the opinion that the implementation of these recommendations will mitigate the occurrence of these situations while allowing insurers to prevent fraud, and enhance consumer confidence in the insurance industry. “

Group disability insurance in figures

The Authority has cited in its report are several figures that insurers have submitted in the framework of the investigation. In 2017, the 1,776 billion dollars (G$) has been seen as a bonus. Of this total, 408 million dollars (M$) were for short term disability, and 1, 368 G$ in the long-term disability.

Still, in 2017, the insurers have paid 1 447 G$ in benefits, including$ 360 Million in short-term disability and 1 087 G$ in the long-term disability.

From 2015 to 2017, an annual average of 86 % of premiums in group disability insurance was paid in the provision of short-term disability. This average was 77 % in the long-term disability.

The annual average of applications for benefits between 2015 and 2017 was approximately 97 000, of which 30 % were requests for benefits in disability of a psychological nature.

For the same period, an average of 95 % of benefit claims short-term disability were accepted. Long-term disability, the acceptance rate was 88 %.

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